FFM Exam Study Guide with
Complete Solutions 2025
Future value/compounding - ANSWER the amount to which current savings will
inrease based on a certain interest rate and a certain time period
Present valu/ discounting - ANSWER is the current value for a future sum based on a
certain interest rate and a certain time period
Assets - ANSWER liquid assets
real estate
personal possessions
investemtn and retirement assets
Liabilities - ANSWER current liablilities
long term liabilities
net worth - ANSWER assets - liablilites
Monthly Cash Surplus (Deficit)= - ANSWER Net Income- (Fixed Exp. +Variable Exp.)
Characteristics of a good budget - ANSWER Well Planned
Realistic
Flexible
Clearly Communicated
, Money Management - ANSWER refers to the day to day finacial activies necessary to
handle current perosnal economic resources while working toward long term finacial
security
Balance sheet - ANSWER aka a net worth statement
specifies waht you own and what you owe
Liabilities - ANSWER are amounts owed to others but do not include items not yet
due, such as next month's rent
Current Liablilties - ANSWER are debts that must be paid within a short time, usually
less than a year
Long term LIABLI - ANSWER are debts that are not required to be paid in full until
more than a year from now
Insolvency - ANSWER is the inabliity to pay debts when they are due; it occurs
whena person's liablilties far exceed his available assets
Debt Ratio - ANSWER LIA divided by net worth
may be used to indicate a person's finacial situation
a low debt ratio is desired
current ratio - ANSWER liquid assets divided by current liabilities
Complete Solutions 2025
Future value/compounding - ANSWER the amount to which current savings will
inrease based on a certain interest rate and a certain time period
Present valu/ discounting - ANSWER is the current value for a future sum based on a
certain interest rate and a certain time period
Assets - ANSWER liquid assets
real estate
personal possessions
investemtn and retirement assets
Liabilities - ANSWER current liablilities
long term liabilities
net worth - ANSWER assets - liablilites
Monthly Cash Surplus (Deficit)= - ANSWER Net Income- (Fixed Exp. +Variable Exp.)
Characteristics of a good budget - ANSWER Well Planned
Realistic
Flexible
Clearly Communicated
, Money Management - ANSWER refers to the day to day finacial activies necessary to
handle current perosnal economic resources while working toward long term finacial
security
Balance sheet - ANSWER aka a net worth statement
specifies waht you own and what you owe
Liabilities - ANSWER are amounts owed to others but do not include items not yet
due, such as next month's rent
Current Liablilties - ANSWER are debts that must be paid within a short time, usually
less than a year
Long term LIABLI - ANSWER are debts that are not required to be paid in full until
more than a year from now
Insolvency - ANSWER is the inabliity to pay debts when they are due; it occurs
whena person's liablilties far exceed his available assets
Debt Ratio - ANSWER LIA divided by net worth
may be used to indicate a person's finacial situation
a low debt ratio is desired
current ratio - ANSWER liquid assets divided by current liabilities
